These are your tax lots that the new cost basis reporting rules apply to.
Brokers are only required to report cost basis information to the
IRS on covered securities. When you sell lots purchased before the new
rules went into effect those lots are called non-covered securities
You will see different sections on your 1099-B for reporting
sales of covered and non-covered shares in both the long term and the
short term gains sections.
Some brokers do report cost basis and capital gains information for non-covered securities on your 1099-B but they do not send it to the
IRS. Even if they don't, you still have to report all information
correctly on your tax forms.
If your broker doesn't provide cost basis information in the
non-covered categories, you will have to double check the cost basis for
those sales using data from somewhere else. If you've had the same
broker all along, you can often get the information you need to do the
checks from them on a "Realized gain/loss report".
Next up: We'll go into a little more detail on what your 1099-B will look like.
Stay Tuned!
Laurie Frederiksen Invest with your friends! www.bivio.com